Despite the talk of a potential recession, the competition for quality employees remains high. And getting the best of the best into your workforce is no longer just a matter of offering the highest salary or hourly wage. Nowadays, benefits packages can be the difference between an amazing worker choosing your business or going elsewhere.
If you’ve been turned down by candidates you wanted to onboard, it might be time to revisit your company benefits package. Here are three questions to ask yourself as you focus on molding your benefits to attain — and retain — the employees you want.
1. Do Your Benefits Support Flexibility?
Prior to COVID-19, flexible work options were slowly becoming more commonplace. That trend exploded during the pandemic, and hybrid work options and flex time have almost become expected in some industries.
Sure, there are some jobs that absolutely can’t be performed remotely. An HVAC technician in Ohio can’t install a furnace in Florida just by logging into their computer. But for marketing, sales, customer service, and a variety of other fields, the best talent might place a priority on flexible work options. If your company is in a hybrid- or remote-friendly industry, failing to provide those benefits could be a deal breaker for prospective employees.
Since the practice of hiring remote — even global — workers has become more widespread, it’s easier than ever to find third-party human resources providers. Either an employer of record or professional employer organization can help businesses handle the administrative tasks associated with payroll and benefits administration.
When weighing the benefits of EOR vs. PEO providers, it’s important to note that there is some crossover of functionality. Both EORs and PEOs can handle HR, payroll, and other admin functions. However, to use a PEO for these purposes, you must have a legal entity in the countries where you intend to hire workers.
Maybe you’re an employer based in Indiana but have remote workers in three different states and two foreign countries. For the workers abroad, you’re legally required to retain an EOR unless you have a physical presence in those countries. For stateside employees, you have more options. You could handle HR tasks internally, engage a PEO, or use your EOR for those tasks. To recap, EORs can usually do anything a PEO can, but PEOs can’t serve foreign employees unless you have a business entity there.
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2. Do Your Benefits Encourage Workers to Stay?
You might think getting qualified people hired is the hardest part of being an employer. While hiring is undoubtedly vital to building a productive team, retention needs to be just as big a priority. If your benefits are focused on getting people to sign up rather than stick around, your turnover might be overly high.
So which benefits encourage retention? The most effective ones tend to provide incentives for greater years of service. Those incentives can take the form of monetary compensation or intangible benefits such as paid time off.
For monetary incentives, a very popular option is to offer a vested profit-sharing retirement plan. Employer-sponsored retirement plans come in all sorts of varieties, but there are some formats especially common for small businesses.
Many of these plans include a safe harbor match on any employee deferrals up to a certain cap. These safe harbor matches are 100% vested upon submission. Discretionary profit-sharing contributions, however, usually follow a vesting schedule. These amounts are only paid in full to employees upon departure if they have worked enough years to become fully vested.
For example, say an employee has accrued $20,000 in profit sharing but has only been employed for two years. This employee might only get to keep 40% of that profit sharing if they resign, depending on the plan’s vesting schedule. It might encourage the employee to stick around if leaving will result in a loss of $12,000 in retirement funds.
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Do You Regularly Ask for Feedback?
If you want to know which benefits your employees value, there’s an easy way to obtain that information. Whether you do it through official surveys or regular check-ins, just ask them about their benefit preferences. In general, employees are more than happy to share what perks and benefits bring the most value to their lives. If you’re not taking steps to get those preferences directly from your workforce, you’re essentially creating your benefits package blindly.
The most comprehensive approach to understanding which benefits your staff appreciate involves a combination of written and verbal questioning. Some people prefer a written format so they can take the time to get their thoughts in order. Written surveys also provide data in such a way that managers and owners can more easily compile the results for analysis.
Conversely, other people might be better at expressing their preferences verbally during quarterly or annual reviews. This requires supervisors to take notes on benefits feedback, but the extra effort can provide valuable data.
Another advantage of collecting information in both written and verbal formats is that the data can be compared. If an employee seems to be expressing different preferences between the two mediums, you should follow up and inquire about the disconnect. They might be shy about expressing their true preferences in person but more willing to divulge them in written form.
Don’t Fall Behind the Times
A strong and well-rounded benefits package can be the backbone of your recruitment and retention strategy. It’s important to re-evaluate your offerings regularly to make sure you’re not falling behind expectations of the modern workforce. By paying attention to the benefits that employees value and that discourage turnover, you’ll find the time and investment worth the results.